NEW YORK (
) -- When it was announced that Jeff Bezos, the
(AMZN - Get Report)
founder and CEO, had bought the
The Washington Post Company
for $250 million cash
, most people trotted out obituaries for American journalism.
I don't understand that. I work for at least three profitable journalism enterprises right now, and came to financial journalism from another one,
. The key to making money online was turned long ago.
Here it is. Know your market. Prove to advertisers that you reach their market. Wash, rinse, repeat.
The trouble is local journalism long ago lost the local market share that justified print ad expenses to local advertisers. Paywalls then made the whole business circle the drain, because charging for online content kills online reach. You're left with overpaid columnists whining that the world owes them a living.
This is no more true than at
The Washington Post
, which saw itself as the house organ of the political establishment. But it lost that title to sites like
long ago. Tell me again what a genius publisher Donald Graham was,
Personally I think the key to the future here is price. Bezos paid $250 million for a franchise that cost John Henry $70 million with
The Boston Globe
. That's a fair price, because while Boston buys you New England, Washington could, and should, buy you the country.
There are many ways to monetize what the
presently does. You can put it on Kindles. You can turn it into TV, into radio, and podcast it. It's a national franchise for politics and an international franchise for policy, not just something to wrap Maryland crabs in.
Bezos will move slowly with this. He will experiment. He will try things. He reminds of the line from
, where Kane is told how much his new paper lost and replies
"at that rate I may have to sell it in 60 years."
(I found that quote at IMDb, which is owned by Amazon.com.) Bezos put just 1% of his personal fortune into this venture, so he can afford to be patient.
Once you have a national franchise, how do you make money with a local product? How do you gather enough share of a local market, enough share of local mind, that you can prove to local advertisers that you are their only choice?